X Ltd operates a standard marginal costing system. The following budgeted and standard cost information is available: Budgeted production and sales 10,000 units £ per unit Selling price Direct material cost – 3 kg × £10 Direct labour cost – 5 hours X £8 Variable production overheads - 5 hours x £4 250 30 40 20 Actual results for the period were as follows: Production and sales 11,500 units Sales value 2,817,500 342,000 468,000 195,000 Direct material – 36,000 kg Direct labour - 52,000 hours Variable production overheads For all calculated variances, tick the correct box to indicate whether the variance is adverse or favourable. Question 29 The direct material price variance is adverse favourable

X Ltd operates a standard marginal costing system. The following budgeted and standard cost information is available: Budgeted production and sales 10,000 units £ per unit Selling price Direct material cost – 3 kg × £10 Direct labour cost – 5 hours X £8 Variable production overheads - 5 hours x £4 250 30 40 20 Actual results for the period were as follows: Production and sales 11,500 units Sales value 2,817,500 342,000 468,000 195,000 Direct material – 36,000 kg Direct labour - 52,000 hours Variable production overheads For all calculated variances, tick the correct box to indicate whether the variance is adverse or favourable. Question 29 The direct material price variance is adverse favourable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Rose company has a relevant range of production between 10,000 and 25,000 units. The following cost…

A: Total variable cost per unit = Direct materials + Direct labore cost + indirect labor + variable…

Q: Heather Incorporated has the following information for its first year of operations: Units produced…

A: There are two methods that are followed while preparing income statements under costing. (1) Full…

Q: Oslo Company prepared the following contribution format income statement based on a sales volume of…

A: The margin of safety represents the difference between actual or expected sales and the break-even…

Q: Vijay Company reports the following information regarding its production costs. $ 10.20 per unit…

A: Under Variable Costing method, variable costs are shown separately to arrive at the value of…

Q: Monty Company produces chairs and has determined the following direct cost categories and budgeted…

A: Introduction:- Standard costs are estimates of the actual costs in a company’s production process…

Q: A company uses activity based costing to divide overheads between its three products and has the…

A: Activity-based costing is used to allocate the indirect expenses to the product on the basis of…

Q: A company manufactures one product (A) for which budgeted details for the forthcoming period are as…

A: Mark-up percentage = Mark-up amount / Total cost of the productWhere,Mark-up amount = Desired profit…

Q: Monty Company produces chairs and has determined the following direct cost categories and budgeted…

A: Introduction:- Standard costs are estimates of the actual costs in a company’s production process…

Q: Walton Manufacturing Company established the following standard price and cost data. Sales price…

A: Income statement is the one which is prepared by the entity for the purpose of computing the…

Q: 8. Camden Ltd. makes two products, X and Y, each of which passes through two production departments.…

A: Production Overheads: The amount of indirect costs incurred while manufacturing a product are…

Q: A company has two products: A1 and B2. It uses activity-based costing and has prepared the following…

A: ACTIVITY BASED COSTINGActivity Based Costing is a Powerful tool for measuring…

Q: Gemma Co uses activity based costing to divide overheads between its two products and has the…

A: Calculate the cost per set-up Cost per set-up = Total Budgeted set-up costs / Total number of setups…

Q: Product A has a selling price of £20 and a unit variable cost of £10. Fixed manufacturing overheads…

A: Unit fixed overheads under the absorption costing = Total Fixed manufacturing overheads / normal…

Q: Ravine Ltd determines the price of jobs using time and material pricing. Budgeted information…

A: It is assumed that Material handling and storage overhead is allocated on the basis of material…

Q: Glew Corporation has provided the following information: Direct materials Direct labor Variable…

A: The costs incurred for the production are classified as the product costs. The costs incurred to…

Q: A company has two products: A and B. It uses activity-based costing and has prepared the following…

A: Activity-based costing is a costing approach in which a company's activities are identified and the…

Q: A company manufactures one product, the JB3. Budgeted fixed overhead per unit is £1 and budgeted…

A: Fixed overhead expenditure variance =Budgeted fixed overhead- Actual fixed overhead Fixed overhead…

Q: Julum Limited manufactures a single product and operates a standard costing system. Budgeted…

A: Labour cost variance means difference of budgeted cost of labour and actual cost of labour. It can…

Q: The following data are given for Bahia Company: Budgeted production (at 100% of normal capacity)…

A: The variance is the difference between the costs estimated and the actual costs incurred. If the…

Q: Zachary Manufacturing Company established the following standard price and cost data.…

A: In a master budget, planned units are used to calculate the planned net income while in a flexible…

Q: Z Ltd has prepared the Budget for the production of 1,00, 000 units from a costing period as unuer.…

A: Raw materials are the type of inventory of materials or substances that are used in the production…

Q: detail for its activities and its product at the start of the period: Budgeted overhead = £400,000…

A: The overhead is applied to the production on the basis of predetermined overhead rate. The overhead…

Q: Taylor Manufacturing Plc produces three types of leather chairs. Budgeted costs and selling prices…

A: This question deals with the concept of theory of constrain. As the name suggest, constrain means a…

Q: The following data was prepared by the Sandhill Company. Total Variable Fixed $ 24/unit Sales price…

A: Inventory includes all the items, merchandise, and raw materials that are used by the business…

Q: Julum Limited manufactures a single product and operates a standard costing system. Budgeted…

A: The variance is the difference between standard data and actual cost.

Q: 8. Given the following data, calculate product cost per unit under variable costing. Direct labor $7…

A: Variable costing is the method of costing, where only the variable costs are assigned to the cost of…

Q: mpute the income or loss for the special offer. (Round your "Per Unit" answers to 2 decimal places.)…

A: Lets understand the basics.In special order situation management try to evaluate whether special…

Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

100%

X Ltd operates a standard marginal costing system. The following budgeted and standard
cost information is available:
Budgeted production and sales
10,000 units
£ per unit
Selling price
Direct material cost - 3 kg x £10
Direct labour cost - 5 hours x £8
Variable production overheads - 5 hours x £4
250
30
|
40
20
Actual results for the period were as follows:
Production and sales
11,500 units
Sales value
2,817,500
342,000
468,000
195,000
Direct material – 36,000 kg
Direct labour - 52,000 hours
Variable production overheads
For all calculated variances, tick the correct box to indicate whether the variance is
adverse or favourable.
? Question 29
The direct material price variance is
adverse
favourable

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Julum Limited manufactures a single product and operates a standard costing system. Budgeted Data (per unit) : Labour 5 hours @ £15.00 Per Hour Budgeted production for August was expected to reach 10000 Units Actual production 11000 Units The actual costs incurred were as follows : Actual Data : Labour 60000 hours @ £14.50 Per Hour a. What is Labour Rate Variance? Choose one from the following: A. £30,000.00 Favourable B. £75,000.00 Unfavourable C. £45,000.00 Favourable D. £45,000.00 Unfavourable
Costing information for Emily Elephant Limited is as follows:Direct material cost per unitDirect labour cost per unitVariable manufacturing overhead cost per unitVariable selling and administrative overhead cost per unitFixed manufacturing overhead for the year£41 £43£6£4£44,000Budgeted production for the year was 4,000 units. What is the budgeted unit product cost according to an absorption costing system? a. £90 b. £101 c. £105d. £94
Perez Manufacturing Company established the following standard price and cost data. Sales price Variable manufacturing cost $ 8.98 per unit $ 3.40 per unit Fixed manufacturing cost Fixed selling and administrative cost $ 2,000 total $ 600 total Perez planned to produce and sell 2,300 units. Actual production and sales amounted to 2,600 units. Required a. Prepare the pro forma income statement in contribution format that would appear in a master budget. b. Prepare the proforma Income statement in contribution format that would appear in a flexible budget. Complete this question by entering your answers in the tabs below. Required A Required B Prepare the pro forma income statement in contribution format that would appear in a master budget. PEREZ MANUFACTURING COMPANY Pro Forma Income Statement Master Budget 2,300 Units
The following data are given for Stringer Company: Budgeted production Actual production Materials: Standard price per ounce Standard ounces per completed unit Actual ounces purchased and used in production Actual price paid for materials Labor: Standard hourly labor rate Standard hours allowed per completed unit Actual labor hours worked Actual total labor costs 907 units 1,033 units $1.91 11 11,704 $23,993 $14.84 per hour 4.6 5,319.95 $81,129 Overhead: Actual and budgeted fixed overhead Standard variable overhead rate Actual variable overhead costs Overhead is applied on standard labor hours. Do not round interim calculations. Round your final answer to the nearest dollar. The direct materials price variance is $1,071,000 $28.00 per standard labor hour $148,959
Zizi plc uses a standard absorption costing system and produces and sells product 8W. The standard cost card is below: Product 8W (€ per unit) Direct material (5 per kg) 15 Direct labour (6 per hour) 12 Fixed manufacturing overhead 10 Total production cost 37 Standard profit 13 Standard selling price 50 * Absorption rate based on standard labour hours Budgeted and actual production and sales units for december 2020 were as follows: Budget Actual Production 1,100 900 Sales 1,000 800 Actual data for December 2020 were as follows € Direct material purchases 1,200 kgs costing 12,000 Direct materials used 1,100 kgs Direct labour hours 500 hours costing 6,000 Fixed manufacturing overhead 5,000 Sales revenue 30,000 An analysis of the Direct labour hours shows that the 500 hours that were paid for 50 were idle time due to a machinery breakdown. There were no inventories of Direct materials or finished products (planned or actual) at the…
Cherokee Manufacturing Company established the following standard price and cost data: Sales price $ 12.00 per unit Variable manufacturing cost 7.20 per unit Fixed manufacturing cost 3,600 total Fixed selling and administrative cost 1,200 total Cherokee planned to produce and sell 2,000 units. Actual production and sales amounted to 2,200 units. Required Prepare the pro forma income statement in contribution format that would appear in a master budget. Prepare the pro forma income statement in contribution format that would appear in a flexible budget.
he following data is given for the Bahia Company: Budgeted production 1,091 units Actual production 974 units Materials: Standard price per pound $1.846 Standard pounds per completed unit 10 Actual pounds purchased and used in production 9,448 Actual price paid for materials $19,368 Labor: Standard hourly labor rate $14.80 per hour Standard hours allowed per completed unit 4.8 Actual labor hours worked 5,016.1 Actual total labor costs $76,496 Overhead: Actual and budgeted fixed overhead $1,055,000 Standard variable overhead rate $25.00 per standard labor hour Actual variable overhead costs $140,451 Overhead is applied on standard labor hours. The variable factory overhead controllable variance is
Under absorption costing, a company had the following unit costs when 9,000 units were produced. Direct labor $7.25 per unit Direct material $8.00 per unit Variable overhead $5.50 per unit Fixed overhead ($67,500/9,000 units) $7.50 per unit Total production cost $28.25 per unit Compute the total production cost per unit under variable costing if 30,000 units had been produced. $31.75 $28.25 $23.45 $15.25 $20.75
Based on the following information, prepare a contribution margin income statement assuming the company uses variable costing. Annual production Sales price Variable production cost per unit Direct materials 50,000 units $40 per unit $10 3 Direct labor $25 per unit Manufacturing overhead Fixed production costs 12. $150,000 each year; $3 per unit at 50,000 units of production Variable selling and administrative cost $1 per unit Fixed selling and administrative cost $100,000 each year Sales: А. Var. Production В. Var Selling & Admin 50,000 1,300,000 Contribution Margin С. Fixed Expenses: Fixed Mfg Overhead 150,000 Fixed Selling & Admin 100,000 250,000 Net Income D.